Receive Cash For Your Business Through The Employee Retention Credit.
Receive Up To $26,000 Per Employee!
Time Is Running Out to File For this Cash Refund, Don’t Miss Out!!
As a result of the pandemic and forced business shut downs. There were various federal programs created to help small and medium businesses. While many of the COVID-19 aid has come to an end, the (ERC) Employee Retention Credit is still available and delivering funds to business owners.
In the following article we’ll review the answers to frequently asked questions about the Employee Retention Credit, address the ERC myths, and address how you can claim ERC funds for your business.
What is the Employee Retention Credit?
Do I qualify?
What is the definition of “Retaining Employees”?
For businesses started prior to February 15th, 2020, a retained employee is defined as:
- Someone who has continuously been employed by you from January 1st, 2020, through December 31st, 2020.
- Someone who has continuously been employed by you from January 1st, 2021, through September 30th, 2021.
Please note: if your business was started after February 15th, 2020, you may still qualify, please skip to the “Recovery Startup Business ERC Eligibility” section.
Eligibility Changes and Constants
There have been changes to the ERC eligibility since its inception in the CARES Act.
- Businesses that received one or two PPP loans qualify for ERC
- h\Hospitals, colleges, universities, and 501(c) organizations qualify for ERC.
Prior to these changes, earlier versions of ERC limited businesses with a PPP loan(s) from applying. Today, businesses that received a PPP loan(s) can still claim ERC. .
ERC qualification is still determined by quarters each year, as outlined below. Businesses that meet the retained employee status can claim ERC for 2020, 2021, or both.
2020 ERC Eligibility
- Your business experienced a full or partial suspension of operations as a result of a governmental order.
- Your business’s gross receipts in any quarter after March 13, 2020, declined 50% or more compared to the same quarter of 2019.
Please note: This means that a business that retained employees and saw an increase in gross revenue still qualifies as long as the business was impacted by lockdowns and/or other governmental restrictions.
2021 ERC Eligibility
Beyond meeting the retained employee status, to qualify for the 2021 ERC, you must meet at least one of the following requirements:
- Your business experienced a full or partial suspension of operations due to a governmental order
- During the first 3 quarters of 2021, your business had a decline of at least 20% in gross receipts compared to the same quarter in 2019 (or, if you weren’t in business in 2019, gross receipts can be compared to 2020).
Maximum Credits Available:
Each year has a maximum credit amount a business is eligible for. The total maximum credit per employee is $26,000, comprised of $5,000 per employee in 2020 and $21,000 per employee in 2021.
2020 ERC Maximums:
For 2020, ERC can be claimed as a refundable tax credit on wages that were paid between March 13, 2020, and December 31, 2020.
ERC for 2020 is 50% of total wages paid, up to $10,000 per employee, resulting in a $5,000 maximum tax credit per employee.
2021 ERC Maximums :
For 2021, the maximum ERC amount was increased to $7,000 per employee per quarter from Q1 through Q3 2021. Thus, the maximum credit for the full year is $21,000 per employee.
Recovery startup businesses can extend the $7,000 per employee amount through Q4 2021, which brings recovery startups’ maximum credit for the full year to $28,000 per employee.
ERC and PPP
Based on these qualifications, if you think that your business is eligible for ERC in 2020 and/or 2021 and you haven’t claimed the credit yet, it’s not too late, but the clock is ticking.
Vertex has partnered with Leyton. Leyton is an international consulting firm that helps businesses leverage financial incentives. They can help determine your eligibility and calculate your maximum refund. Please click below to schedule a free consultation to determine how much of a refund you may be eligible for. The consultation is free but the refund can be considerable. You don’t pay anything unless you receive a refund.
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